Rics: Housing market remains in the doldrums

| September 13, 2011 | 0 Comments

The Royal Institution of Chartered Surveyors (Rics) has today reported that the UK housing market remained weak in August with house prices falling further.

According to the Institution, homeowners remain reluctant to put their properties up for sale, while buyers continue to struggle to secure a mortgage and remain uncertain about the economic climate.

The Rics report said 23% of surveyors reported house prices fell rather than rose – this reading has been in negative territory for more than a year.

Furthermore, the Rics said the number of completed home sales fell to an average of 14 in the three months to August – the lowest level for over two years.

Commenting on the survey, Alan Collett of the Royal Institution of Chartered Surveyors said: “The risk is that the worsening economic picture will gradually begin to have a more material impact on sentiment and discourage potential house purchasers, even where mortgage finance is available.”

Meanwhile, surveyors remain negative about the direction of future house prices with 23% more surveyors expecting prices to fall rather than gain over the next quarter.

New buyer enquiries, which signal buyer demand, declined in August with 3% more surveyors reporting a fall than a rise, while new instructions moved from a net balance of -8% to 0%.

Yesterday, the Council of Mortgage Lenders (CML) said first-time buyers have to put down an average deposit of 20% in order to secure a mortgage.

With house prices edging higher for the year to date, the average new mortgage has gone back up to £120,000, the CML said, meaning affordability remains a major issue for first-time buyers.

However, the Council did reveal that the number of loans for house purchase rose in July.

According to the Council, there were 48,400 loans advanced for house purchase in the month – up by 1,000 from June’s figure but almost 7,000 lower when compared with July 2010.

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